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Asian Journal of Research in Banking and Finance
Year : 2017, Volume : 7, Issue : 7
First page : ( 1) Last page : ( 10)
Online ISSN : 2249-7323.
Article DOI : 10.5958/2249-7323.2017.00064.5

Determinants of Capital Structure of Pharmaceutical Firms in India

Ram Maloth Raghu

Assistant Professor, Department of Commerce, Post Graduate College, Secunderabad, India, malothram@gmail.com

Online published on 17 July, 2017.

Abstract

The paper identifies the important determinants of capital structure of 136 pharmaceutical companies which are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) for the period of 11 years from 2005 to 2015 was used. Seventeen independent variables and one dependent variable have been tested by using the Robust Regression Model. The study revealed that factors such as Tangibility, Sales, Financial Leverage, Retail Investors’ Holding have significant positive impact on debt/equity ratio and ROCE, ROA, RONW, Uniqueness, NDTS, Age, Earnings Volatility, Promoters’ Holding, Institutional Investors’ Holding, Price Earnings Ratio have significant negative impact on debt/equity ratio. Liquidity, Growth of Total Assets, Operating Leverage have an insignificant impact on debt/equity ratio.

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Keywords

Capital Structure, Robust Regression, Tangibility, Operating Leverage.

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